Indonesia to run carbon compensation based on forestry, eyes RM888 m in transactions

Jakarta, March 14 – Indonesia plans to start the sale of carbon compensation from its forest sector soon, while the authorities are working on recognizing existing international standards, the Antara State Agency reports.

The country of Southeast Asia stopped carbon trading at the end of 2021, wishing to determine the priority of fulfilling its own carbon reduction goals as it establishes broad carbon trade rules.

The government launched an internal carbon exchange in 2023, and in January the Exchange began to allow the carbon certificates to be sold to foreign buyers, but the proposed certificates were from reducing carbon from energy projects.

Trade in carbon compensation from the forest sector by private companies and forests, managed by the community, will soon be launched, said Forestry Minister Raja Julie Antoni, according to Antari’s report on Thursday.

The potential up to 3.2 trillion of Rs (nearly 888 million RM) carbon operations a year from this sector in 2025, the Ministry notes, predicting transactions between Rs 97.9 trillion to 258.7 trillion by Rs by 2034.

The government also set a goal to complete mutual recognition agreements with international standards such as Verra, Gold Standard and Vivo Plan by May, the Ministry reports.

Some companies offered carbon compensations from Indonesian natural projects to the 2021 rules, but they were asked to stop and said to accept the standard Jakarta, according to the Industrial Association that lobbies recognition of international standards.

“We need to admit that we sell is invisible. Therefore, the process, actors, certificates should be clear and acceptable markets. So far, whether or not it, we must admit that Indonesia’s certificate is not clear, ” – said Riza Sarha, head of the Indonesia Carbon Trade Association at a February parliamentary hearing.

Indonesia has set a goal to reach zero green house by 2060 or earlier, although President Sunianto President Sunianto stated the G20 forum that it was optimistic, a nation could reach a goal by 2050. – Reuters